Mr John Whittingdale (Maldon & East Chelmsford, Conservative)

I beg to move amendment No. 236, in

clause 91, page 86, line 14, leave out subsections (1) and (2) and insert—

'(1) If, after following the procedure in section 90, OFCOM then proposes to give the notified provider an enforcement notification, it shall first—

(a) give written notice of its proposed action stating the matters to which they have taken objection, the action they propose and their reasons for it;

(b) inform the notified provider that any oral or written representations made to OFCOM within the period specified in the notice will be considered, and give the notified provider a reasonable opportunity to make such representations; and

(c) subject to subsection (2), if so requested by the notified provider, give the notified provider or its authorised representatives an opportunity to inspect the documents in OFCOM's file relating to the proposed decision.

(2) OFCOM may give the notified provider an enforcement notification if the notified provider—

(a) is or has been in contravention, in any of the respects notified, of a condition specified in the notification under section 90;

(b) has not taken the necessary steps to remedy the contravention; and

(c) has received a notice under subsection (1) and been afforded the opportunities to make representations and to access OFCOM's file as set out in that subsection.'.

The Minister will appreciate that the penalties possible under the Bill are fairly substantial. Therefore, when dealing with a possible imposition of a fine amounting to anything up to 10 per cent. of turnover, it is only right that we should have proper safeguards, and give an opportunity to the company faced with that penalty to make its case.

Under the clause, the procedure for enforcement of notification of contraventions is in two stages. A company is given notification that a contravention has occurred. If that is not put right after a certain time, there is enforcement. That is a shortened form of the procedure that takes place under the Competition Act 1998. Under that Act there is a three-stage process before a fine is levied. First, there is notification that a contravention has occurred. There is then a statement of objections, after which comes the enforcement notice. The statement of objections is quite important because that sets out why Ofcom believes that the company is in breach of the conditions. It also allows the company access to the evidence on which Ofcom will base its decision.

It is natural justice that, if a company is to be faced with such a draconian penalty, it should have an opportunity to see the evidence that has led Ofcom to reach its decision, and to make representations to Ofcom against it. It would seem strange if the process for the imposition of penalties under the Bill were different from the process laid down in the 1998 Act. The amendment would bring the process into line with that of the 1998 Act by inserting an additional safeguard, which would allow the company to see why it was faced with a huge penalty, and to make representations against that.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The hon. Gentleman is right that there are two stages in the process as set out in the Bill. The amendment would add a third stage before an enforcement notification could be issued. I hope that I can persuade him that that would not be the right thing to do. I appreciate that hon. Members may feel that it would be unreasonable for Ofcom to be able to force a contravening provider to take particular action without the provider having had an opportunity to question it or to propose alternatives, but that is not the case in this example. The operator will have known at the initial stage, via the contravention notice issued under clause 90, of the case against him, and will have had an opportunity to make representations and to take corrective action if he wished.

The hon. Gentleman rightly made the point that the process is in some respects different from that under the Competition Act. That refers to the point that I was making in response to the hon. Member for Ryedale. It is important to recognise and reflect on the differences between general competition law and a sectoral regime such as that in the Bill.

Broadly, the 1998 Act lays down general prohibitions in regard to anti-competitive agreements and conduct, leaving industry free to operate as it wishes, unless or until prevented from doing so. However, what is anti-competitive in a given case—and so whether or not there is a breach—can only be established after a full investigation. By contrast, the sectoral regime in the Bill lays down a variety of specific obligations that will be the subject of consultation in advance, so the risk of genuinely inadvertent breach is much smaller. I hope that the hon. Gentleman will withdraw the amendment.

Mr John Whittingdale (Maldon & East Chelmsford, Conservative)

I accept that the provision deals with a sectoral breach, and that there may be a case for slightly different—or differently phrased—rules for such breaches. If the Minister assures me that the opportunity for the company to have access to all the relevant evidence and to make representations is included in the Bill, I shall accept that I need not press the amendment. Will he give me that assurance?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

On the point of ''access to file'', it will of course be for Ofcom to set out the process. It would certainly be in line with good practice for Ofcom to operate as the hon. Gentleman suggests. I hope that Ofcom will consider the matter seriously and sympathetically, and will consider that, in practice, it is important how such access is given. However, that is a matter for Ofcom to determine in light of good practice elsewhere.

Mr John Whittingdale (Maldon & East Chelmsford, Conservative)

So we are placing our trust in Ofcom. On that basis, and given what the Minister has said, I will withdraw the amendment, although I still have a small doubt as to whether Ofcom will behave as sympathetically as the Minister believes that it will. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

As I understand it—the matter was discussed by the scrutiny Committee—the nature of the penalties that we shall discuss are such that the proceedings and the notification might be held as criminal proceedings for the purposes of article 6 of the European convention on human rights. One of the benefits that flow from that for those subjected to proceedings is that there is a presumption of innocence. I am not sure that I see where that is said in the Bill.

Perhaps the Minister would make it clear that, although Ofcom may have reasonable grounds for believing that there is a contravention, in practice proceedings beyond that point will continue on the basis that it falls to Ofcom to prove its case. The Minister should also make it clear that there is a presumption of innocence towards the person against whom the notification is made.

Dr Nick Palmer (Broxtowe, Labour)

I may be missing something, but has it been foreseen in the practice of Ofcom that if the representations made by the provider are satisfactory to Ofcom, the regulator will formally inform the provider that it no longer has that notification hanging over it? There is provision for an

enforcement notice, but so far as I can tell, there is no provision for responding to representations. A company might feel that there is an indefinite threat over it.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

Clause 91 is an important part of Ofcom's tool kit for enforcing conditions of entitlement. Essentially, it allows Ofcom, after issuing a contravention notification under clause 90 and considering any representations made and corrective action taken by the provider concerned in response to it, to issue an enforcement notification directing the provider as to the corrective action he should take, and to set a time limit for him to do so. That practical and positive enforcement action is clearly an important complement to the power to impose financial penalties under clause 93, which we will come to shortly. The enforcement notification is the second stage in the process; a contravention notification must be issued first.

In response to the hon. Member for South Cambridgeshire, Ofcom, as a public authority, is subject to the European convention on human rights and must therefore act in a way that is compatible with it. We feel that that, coupled with the right to a full appeal against any decision, makes the arrangements compliant.

I think that I can give my hon. Friend the Member for Broxtowe (Dr. Palmer) the assurance—indeed, I am sure that I can give him the assurance—that the information that he spoke about can be given. No express provision is required in the Bill. However, I am grateful to him for raising the point.

Question put and agreed to.

Clause 91 ordered to stand part of the Bill.